CHICAGO--(BUSINESS WIRE)--Fitch Ratings has affirmed the ratings of UnitedHealth Group
Incorporated (UNH) and its insurance-company subsidiaries and removed
the ratings from Rating Watch Negative. Concurrent with these ratings
actions, Fitch has assigned UNH and its subsidiaries Negative Rating
Outlooks. A complete list of rating actions follows at the end of this
release.

KEY RATING DRIVERS

Fitch's decision to remove UNH and its subsidiaries (collectively
UnitedHealth Group) from Rating Watch Negative reflects the agency's
improved understanding of UNH's financing and integration plans for the
anticipated second half 2015 close of UNH's acquisition of Catamaran
Corp. (CTRX).

The Negative Rating Outlooks assigned to UnitedHealth reflect
uncertainty around UNH's ability to reduce its anticipated post CTRX
close increase in financial leverage to levels more commensurate with
the company's current ratings and to a lesser extent, the potential
operational and earnings disruptions that could arise as CTRX is
integrated into the UNH organization.

Fitch's expectation is that UNH will fund the CTRX purchase by issuing
approximately $13 billion of new debt. Since the acquisition was
announced, UNH has added a $1.5 billion delayed draw term loan and
increased the capacity of its commercial paper program by $2 billion and
plans to issue approximately $10 billion in senior unsecured debt over a
broad spectrum of maturities.

Upon the close of the CTRX acquisition, Fitch estimates UNH's
debt-to-EBITDA and financial leverage ratios will increase to
approximately 2.4x and 48% from 1.5x and 35% respectively at yearend
2014. Fitch expects UNH's post CTRX acquisition EBITDA-based interest
coverage to decline to an estimated range of 10X-12X, down from a very
strong nearly 19X for the full year 2014.

Fitch estimates that by year-end 2017 debt-to-EBITDA and debt-to-total
capital ratios approximating March 31, 2015 levels of 1.5X and 37%,
respectively, are achievable for UNH. Under such scenarios debt would be
reduced through a combination of earnings growth, retained earnings and
a reduction in share repurchase activity.

Favorably, the CTRX acquisition will further increase UnitedHealth's
scale and diversity, particularly its sources of unregulated earnings
and cash flows. Fitch continues to view UnitedHealth's overall market
position within the health insurance and managed care sector as largely
unique, in that it enjoys strength across a broad spectrum of products,
services, and geographies.

First quarter 2015 operating results continue to be strong and
consistent with Fitch's median sector credit factor guidelines for the
current rating level. UNH reported annualized return on average capital
of 11.3% during the first quarter of 2015, essentially unchanged from
full year 2014's result. EBITDA margin was 8.4% during the first quarter
of 2015, up from 7.6% in the comparable period of 2014, but off from
full year 2014's figure of 9.0%.

Share repurchase activity reached $900 million year-to-date March 31,
2015 and management said it expected 'moderated share repurchase
activity' for the remainder of 2015 in support of the pending Catamaran
acquisition.

RATING SENSITIVITIES

Key rating triggers that could result in a downgrade include:

--Lack of meaningful progress over the next 12-24 months towards
debt-to-EBITDA and debt-to-capital ratios approximating 1.5x and 37%
respectively;

--EBITDA-to-interest coverage below 10x.

Key rating triggers that could result in a return to a Stable Outlook
include:

--Significant progress toward deleveraging targets of debt-to-EBITDA
ratio below 1.8x and financial leverage ratio below 41%, while
maintaining a double-digit EBITDA-to-interest coverage ratio, could lead
to a return to a Stable Rating Outlook.

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